Patients visiting hospitals or clinics are usually health-conscious and do not care too much about how their bills are handled.
Nevertheless, there is a complex system behind that ensures medical workers get paid for their work. The guarantor is a key element of medical billing service.
When you understand what a guarantor is playing in medical billing, it can become straightforward for you to manage your bills and not face any misunderstandings.
We’ll outline what medical billing guarantors means, explain the main categories of guarantors and show why they are so important.
What is Guarantor in Medical Billing?
A guarantor in medical billing means the person accountable for paying a patient’s medical bills.
It is the responsibility of medical billing guarantors to pay off the costs of offered services to the patient.
In some instances, the guarantor is not the patient in question. Guarantors are to receive the billing statements and have medical services paid for, via insurance, out of pocket, or a combination of the two.
Example:
In case a child goes to the doctor, the parent or guardian who signs the financial agreement when making an appointment takes responsibility for the payment. The child does not have to cover the bill, the parent is the one to make the arrangements.
Most times, when a patient registers or checks in for an appointment, their guarantor details or the person whose obligation is to pay for his/her treatment are always taken. Including their name, contact, and signature. By giving this information, if payments are due or insurance requires additional paperwork, the right person can be called.
Types of Medical Billing Guarantors
These are the main types of guarantors in medical billing
Self-Guarantor (Adult Patient):
An adult who pays his bills out of his wallet is the patient and the guarantor. Such an arrangement entails little clarification. A 30-year-old adult patient will sign their own documentation at the clinic, and it is he / she that will be responsible for any incurred costs.
Parent or Legal Guardian:
Because minors cannot be legally responsible for debts, payment liabilities of minors are placed on a parent or guardian. Hereby, the parent or legally sponsored body is liable and listed as guarantor.
Spouse or Partner:
Sometimes, the main policyholder may be a spouse, in which case the spouse will be responsible for signing the financial agreement as guarantor. One example would be if the husband is responsible for his wife’s insurance, and she gets healthcare, he could be named as the guarantor, depending on how the paperwork is done.
Financially Responsible Party (Other):
Sometimes another person, perhaps a family member or friend, or a caregiver in adult residential care, may choose to pay bills on another’s behalf. Such a setup can be in use for cases like elderly care, long-term care, or when a person is being legally assisted to manage the finances of another person.
Institution or Organization:
Sometimes, an organization, such as a foster care agency, correctional facility, or public service program, can be assumed as a guarantor. This usually means a party officially agreeing, by accepting contractual obligations or by legal requirements, to pay for the patient’s healthcare expenses.
It is important to know the importance of an individual who guarantees in the medical billing process.
Importance of a Guarantor in Medical Billing
Here’s why they’re so important:
Ensures Payment Responsibility:
Providers need to know in advance to whom to refer payment. A named guarantor guarantees that providers can generate billing records, collect overdue payments, and ensure that the right person is liable to pay the charges.
Prevents Billing Confusion:
The role of a guarantor helps remove miscomprehension in regard to the payer responsibility. Identification of a guarantor can make things clear and simplify issues with family bills, and insurance claims.
Facilitates Insurance Processing:
Usually, a guarantor is under insurance bearing his or her name. Consider a primary policyholder, for instance, who might be the guarantor for the medical expenses. In turn, the process of insurance procedures becomes more accurate and quicker.
Legal Accountability:
The healthcare providers are mandated by law to have an accountable person to check on the unpaid medical bills. When the patient is a minor or legally incapable of paying (a disabled adult) the guarantor becomes the legal liability.
Helps with Collection Efforts:
Providers and collections teams tend to address the guarantor in case of non-payment of bills; never a patient. This way, if there is an issue in payment recovery, everyone will understand who to hold responsible. It can accelerate the payment recovery process.
Common Misunderstandings About Guarantors
Lots of individuals have misconceptions about what being a guarantor means:
- “When I am the patient, I will be guarantor”
Wrong – especially if you are a minor, or someone else signs a financial agreement.
- If I have insurance, I won’t need to find a guarantor.
Sometimes, insurance doesn’t cover all the expenses. You must have someone who will pay the balance.
Final Thoughts
A well-understood role of the guarantor in medical billing helps patients and providers in billing, as they will avoid unnecessary deliberations and confusion on what is payable. Well, it’s a complex procedure, so it should be taken care of by experts like DWP Medical. Give the billing tasks in the hands of professionals to get accurate billing and faster payments.
- Medical payment is the main purpose of the guarantor.
- The patient does not have to be the guarantor.
- Medical billing guarantors is an important person in processing insurance claims and any payment problems.
Embed it in your practice to verify the identity of the guarantor in the medical forms, so as to prevent problems of billing further down the line.